All Banksia investors are part of the class action lodged with the Victorian Supreme Court.

Commercial lawyer Rob Crowe from Riordan Legal in Shepparton is acting for lead plaintiff Laurence Bolitho.

But Mr Crowe said all 16000 debenture holders stood to benefit financially if the claim was successful.

‘‘I reckon it is a very strong case,’’ Mr Crowe said.

A writ for the group action was filed in the Victorian Supreme Court on Christmas Eve.

The writ alleges Banksia Securities and Cherry Fund were not run in a proper and efficient manner.

The action also names as a defendant the Sydney-based The Trust Company.

It is accused of failure to adequately supervise and investigate the financial position and viability of Banksia Securities and Cherry Fund.

The auditor of the failed companies, RSD Chartered Accountants of Bendigo, is also being pursued for failure to adequately audit the books or report any breaches of law to the Australian Securities and Investment Commission.

Five directors are alleged to have failed to adequately manage the financial position and viability of the two companies and protect the interests of investors.

The directors are Geoffrey Grenville Skewes, of Warrnambool, Patrick John Godfrey, of Kyabram, Nicholas Livingston Carr, of Geelong, Neil Stewart Mathison, of Geelong, and Peter William Keating, of Melbourne.

The class action will be run by leading Melbourne barrister Norman O’Bryan, a senior counsel with extensive experience in commercial law.

Mr Crowe said the Melbourne legal team now had the full list of debenture holders and investors could expect to receive a letter next month outlining the case.

‘‘There is a huge amount of leg work, the discovery will be huge,’’ Mr Crowe said.

Mr Crowe said it was important for debenture holders to understand they were not exposed to further financial loss by being a part of the group action.

‘‘If this action were unsuccessful there is no possibility of a cost order being made against any plaintiff other than Laurie Bolithio,’’ he said. ‘‘If the action fails they are no worse off, but if it succeeds they will share on a pro-rata basis the funds recovered.’’

Before mediation or trial takes place, debenture holders will be given an opportunity to opt out of the case.

Mr Crowe said he expected the case could reach court-ordered mediation by early next year, but if it went to trial, it would be 18 months away.

A website is also being established to keep Banksia investors informed.